- Russell Price, a senior economist at Ameriprise Financial Inc.
During the last testimony Janet Yellen pointed out that the world's largest economy still requires a support from its central bank. The recovery is on the way, with labour market showing signs of recovery as well. Earlier this month a report showed jobless rate fell to 6.1% in June, while the economy added 288,000 jobs over the period. The only indicators that are still lagging behind are the participation rate and wage growth.
Over the last several months weekly unemployment claims stabilized around 300,000, while last week the indicator fell to its lowest level since February 2006. Weekly report from the Labor Department showed initial claims for jobless aid sank by another 19,000 to a seasonally adjusted 284,000 in the week ended July 19. The reading came above market's expectations for a 305,000 figure, while previous week's level was revised up slightly. The less-volatile four-week moving average remained still above 300,000-mark, however, also posting to a 7,250 drop over the period. The labour market is on the mend, however, the economy has not matched those gains so far, contracting 2.9% in the first quarter. Experts are betting on a 3% expansion for the second quarter, meaning the economy almost remained flat for the first half of 2014. The next GDP report will be unveiled by the Bureau of Economic Analysis on July 30.
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